Many companies and organizations are continuing to look for ways to reduce their internal cost of operations and overhead. Implementing LEAN manufacturing principles has become a very important concept and one that may help improve overall efficiency of operations, directly impacting bottom line results. This blog is written for those organizations.

06/28/2010

The Eight Deadly Wastes – Do You Know What They Are?

There are many wastes that can occur in a manufacturing process. Re-work, in-efficient movement and production down time are just a few of the obvious waste. But, do you know what the eight most common waste are and how does it impact value added and non-value added activities.

Before we can even talk about waste, we need to define what is value added versus non-value added processes in a manufacturing environment. Value added is any activity that changes the fit, form, or function of a product. This typically is a modification to a products performance that enhances its efficiency. An example of this would be increased fuel economy due to an engine redesign. The key to value added is that the customer must be willing to pay for these activities.

So, what is non-value added? Non-value added is any activity that does not change the fit, form, or function. The customer is typically not willing to pay for these. These are the costs that must become the focus to be reduced or eliminated.

The key to a LEAN manufacturing environment is to eliminate these eight wastes. The eight wastes are non-value added activities. By eliminating these eight wastes you will increase your value added abilities which will ultimately increase profitability. If you can manage these wastes it will improve your earnings potential and improve cashflow.

The acronym for the eight wastes is DOWNTIME. Downtime stands for:

Defects

Overproduction

Waiting

Non-value added processing

Transportation

Inventory excess

Motion waste

Employee/people waste

1. Defects

Defects are usually due to inspection and rework of defective material in inventory. Some causes of defects are:

Weak process capability

Poor quality controls

Uncontrolled inventory levels

Poor process documentation

Misunderstood customer needs

Design changes

Poor machine capability

2. Overproduction

Overproduction is making more than is required by the customer, making earlier than is required by the customer and making product the customer does not want. This is a major flaw that occurs unknowingly with most manufacturers. This waste can tie up significant working capital resources that can be used for other business operations. Some key causes of overproduction are:

Producing to a forecast

Misuse of automation

Long set-up times

Just-in-case production

Unclear customer needs

Engineering changes

3. Waiting Waste

Waiting waste is idle time that is created when waiting for materials, equipment, product, etc. Some key causes of waiting waste are:

Unbalanced workload

Unplanned downtime

Excessive set-up times

Poor supplier deliveries

Poor process quality

Producing to a forecast

4. Non-Value Added Processing

These are non-value added activities within the process. Causes of processing waste are:

Poor process control

Poor document control system

Misunderstood customer needs

Poor process communication

Excessive queue times

Just in-case logic

Redundant approvals

Producing to forecast

5. Transportation Waste

This is the waste incurred by transporting parts and materials around the plant facility. Causes of transportation waste are:

Poor plant layout

Misaligned process flow

Large batch sizes

Producing to a forecast

6. Inventory Excess

This waste occurs when there is supply in excess of real customer demand. This waste masks real production. Causes of excess inventory are:

Production buffers

Unreliable suppliers

Excessive queue times

Unbalanced workload

Producing to a forecast

Incentive system

Misunderstood customer needs

Long set-up times

7. Motion Waste

Motion waste is any movement of people or machines that does not add value to the product or service. Causes of motion waste are:

Poor layout

Unplanned downtime

Unorganized Workplace

Inadequate process controls

Poor methods

8. Employee/People Waste

This is the waste of not using people’s mental, creative, and physical abilities. Causes of people waste are:

The Syndrome – “Not Invented Here”

Lack of teamwork

Lack of adequate training

Poor communications

Misaligned process flow

By understanding these wastes an organization can begin to create an environment which allows company’s to supply product paced by the demand of their customers with as little waste as possible. This systems wide approach will shift a company from maximizing utilization and productivity to maximizing material flow and elimination of waste, ultimately increasing operating results and true profitability.

For more information on the eight deadly wastes please contact David Blain at dblain@macpas.com.